Act of 1950 amended section 7 of the clayton act and redirected mergers toward the conglomerate variety scherer 1980, pp. Congressman celler, in testifying for the celler kefauver bill that was the 1950 amendment to 7 of the clayton act, said. The key pieces of antitrust legislation in the united statesthe sherman antitrust act of 1890. The object of the act is to restrict anticompetitive mergers resulting in acquisition of assets. A 1950 refinement of previous antitrust legislation dealing primarily with mergers. Cellerkefauver act is a united states federal law passed in 1950 that reformed and strengthened the clayton antitrust act of 1914, which had amended the sherman antitrust act of 1890 the cellerkefauver act was passed to close a loophole regarding asset acquisitions and acquisitions involving firms that were not direct competitors. The united states congress passed the celler kefauver act in 1950 with the goal of strengthening the provisions of the clayton antitrust act of 1914. Passage of the celler kefauver antimerger act in 1950. The priceconcentration hypothesis, jts, version 032406 3 cellerkefauver act of 1950, in several decisions in the 1960s and 1970s. Following the passage of the celler kefauver act in 1950, courts began applying section 7 of the clayton act to conglomerate mergers. Mueller 4 separately identified a shift in the composition of merger activity following 1950. The three founding pieces of antitrust legislation were the sherman antitrust act 1890, which laid the foundation of antitrust legislation. The robinsonpatman amendment made more enforceable section 2, which relates to price and other forms of discrimination among customers.
Congress in 1950 that was intended to strengthen previously enacted antitrust legislation known as. While the clayton act prohibited mergers that reduced. The united states congress passed the cellerkefauver act in 1950 with the goal of strengthening the provisions of the clayton antitrust act of 1914. Us antitrust law and policy in historical perspective harvard. Breaking down cellerkefauver act the former antitrust legislation. Specifically, the act broadened the applicability of antimerger provisions in the clayton antitrust act. Congress in 1950, the cellerkefauver act strengthened previous antitrust legislation by amending sections and. While the clayton act prohibited stock purchase mergers. This act is an amendment to the clayton antitrust act of 1914. In recent years, however, conglomerate merger enforcement has been largely dormant. Sherman antitrust act of 1890 promised to rein in the trusts through federal prosecutions. Seller concentration played a central role in the courts analyses and decisions.
Other notable legislation is the federal trade commission act of 1914 established the federal trade commission 1, the robinsonpatman act of 1936 provided protection against price discrimination to small retailers, and the celler kefauver act of 1950 closed the loopholes regarding asset acquisition by potential competitors to limit. Pdf the evolution ofantitrust law in usa researchgate. Firms could evade section 7, however, by instead acquiring the physical assets plant and equipment of competing firms. Passage of the cellerkefauver antimerger act in 1950 marked the beginning of a new antitrust experience across the whole u. The act empowers the government to prevent vertical mergers and conglomerate mergers which could limit competition. Other notable legislations are the federal trade commission act of 1914 established the federal trade commission 1, the robinsonpatman act of 1936 provided protection against price discrimination to small retailers, and the celler kefauver act of 1950 closed the loopholes regarding asset acquisition by. Passage of the celler kefauver antimerger act in 1950 marked the beginning of a new antitrust experience across the whole u. Pdf antitrust and the competitive structure of the u. Using a crosssection of 247 fourdigit sic industries, we present an econometric analysis testing the hypothesis that innovation rates in 1982 were significantly influenced by market structure, and that these influences had disperate. Some companies did this to such an extent that it reduced competition, which had the potential to effectively sideline the clayton act. The clayton antitrust act was enacted in 1914 to prevent anticompetitive acts. Act of 1936, the cellerkefauver act of 1950, and other acts, have increased the protection the law affords our. The cellerkefauver act was passed to close a loophole regarding asset acquisitions 1 and acquisitions involving firms that were not direct competitors.
The purpose of this paper is to identify the major determinants of innovation and to examine whether they affect small firms differently than large firms. The celler kafauver act broadened the applicability of antimerger provisions in the clayton antitrust act. The first cases under the amended section 7 reached the supreme court during the peak of the warren court era of structural antitrust jurisprudence in the early 1960s. Celler kefauver act of 1950 the celler kefauver act amended. A requirement of certainty and actuality of injury to competition is incompatible with any effort to supplement the sherman act by reaching incipient restraints. The priceconcentration hypothesis, jts, version 032406 3 celler kefauver act of 1950, in several decisions in the 1960s and 1970s. Learn about the history and impact of the cellerkefauver act. Home collections database of federal statute names cellerkefauver act see antimerger act cellerkefauver act see antimerger act popular name statutized. The priceconcentration hypothesis, jts, version 032406 2. In assessing the celler kef auver act and its subsequent enforcement, it was discovered that the major impact was through the deterrent effect. This study documents the frequency, extent, and impact of u. May 18, 2018 the cellerkefauver act was passed in 1950 to create additional restrictions in addition to the clayton and sherman antitrust act. Economics meets sociology in strategic management advances in. Cellerkefauver antimerger act an american antitrust law passed in 1950 that closed a major loophole in the clayton act.
The celler kefauver act closed this loophole, giving the government the power to stop vertical mergers and asset acquisitions regarded as reducing competition. Cellerkefauver act antitrust legislation enacted in 1950 which prohibits companies from merging with vertical partners, such as suppliers and distributors, if it can be demonstrated that the merger would impede competition. Act in september 1978 signi cantly relaxed those constraints. The celler kefauver act of 1950 was just such a shock, in that it opened horizontal and vertical mergers to federal scrutiny and encouraged firms to spend excess capital on other kinds of acquisitions. Specifically, the act was enacted to seal a loophole in the clayton act regarding certain forms of mergers and acquisitions. The robinsonpatman act of 1936 or antiprice discrimination act, pub. Cellerkefauver act of 1950 a 1950 amendment to the clayton act that prohibits one firm from merging with a competitor by purchasing its physical assets if the effect is to substantially lessen competition. Cellerkefauver act is a united states federal law passed in 1950 that reformed and strengthened the clayton antitrust act of 1914, which had amended the. Celler kefauver act of 1950 the celler kefauver act amended the clayton act, section 7, which prohibits a firm from merging with a competing firm and thereby lessening competition by acquiring its stock. The merger guidelines and the integration of efficiencies.
Cellerkefauver antimerger act financial definition of celler. And sometimes they are meant to garner political support for a law by giving it a catchy name as with the usa patriot act or the take pride in america act or by invoking public outrage or sympathy as with any number of laws named for victims of crimes. The act amended previous anttrust legislation clayton act which prohibited certain horizontal mergers. Congress in 1950 to strengthen antitrust legislation associated with the clayton antitrust act of 1914. Learn vocabulary, terms, and more with flashcards, games, and other study tools.
The cellerkefauver act targets mergers where companies purchase suppliers, and. The cellerkefauver act was passed in 1950 to create additional restrictions in addition to the clayton and sherman antitrust act. Celler kefauver antimerger act, also known as an act to amend an act entitled an act to supplement existing laws against unlawful restraints and monopolies, and for other purposes, approved october 15, 1914 38 stat. Modern merger law in the united states began with the passage of the celler kefauver act in 1950, which amended section 7 of the clayton act to substantially broaden its reach. Yet, the application of the act required government to forge industry specific standards of competitive structure. Clayton antitrust act summary, history, significance. Two sections of the clayton act were later amended by the robinsonpatman act 1936 and the celler kefauver act 1950 to fortify its provisions. Section 7 of the clayton act its application to the conglomerate merger in the 180 year span of industrial development since the advent of the steam driven mill, perhaps the single unifying element permeating american commerce has been its continued and accelerating growth. A decade of administration of the cellerkefauver antimerger act. Cellerkefauver act explained the business professor. The celler kefauver act and the deterrent effect springerlink. Antimerger act financial definition of antimerger act. Passage of the cellerkefauver antimerger act in 1950. The most important ones include the robisonpatman act of 1936, which strengthened price discrimination prohibition, and the celler kefauver act of 1950, which prohibited corporate mergers that would tend to reduce competition or promote monopolies shughart, 1990.